Carrier Procurement Process

added by MenloEditor
November 29, 2010 5:36 PM

As a non-asst based 3PL Menlo relies on its relationships with over 300 subcontracted carriers (Transportation Service Providers or TSPs) to execute the shipment transactions within the scope of the DTCI contract.

Carrier Procurement Process Overview:

Carrier Identification:

Menlo identifies prospective TSPs via a number of methods. These methods include:

Once the candidate TSP list is developed Menlo launches lane based bids for capacity to the carrier community. Bids are segregated by mode and equipment type; however, carriers respond to multiple bid packages (as example, TL dry van and flat bed) dependent upon their capabilities. Bids are phased by site implementation date so that rates and capacity are bid and committed in reasonable proximity to the site’s go-live date. Additionally, Menlo may issue supplemental bids for sites already live in the event that growing volumes require additional capacity, new lanes develop, or incumbent carriers are not meeting performance requirements.

Each bid is conducted with web-based tools that allow carriers to review lanes, volumes, and any site unique requirements. Menlo notifies the carriers of the upcoming bid(s) via email that further explains access to Menlo’s web site. Many of the rate and lane files are available for download so that TSPs may analyze the data with their own tools. The carrier then submits rates for the lanes of interest via data entry into Menlo’s web site or upload of larger response matrices into the same web site.

Carrier Selection:

Menlo selects the TSPs based upon the TSP’s capability to demonstrate a compelling value proposition for inclusion in the DTCI program. Selection criteria include the below listed elements:

Capacity

Financial health

Operational soundness

Rates

Service history (incumbency counts)

Site-specific requirements

Small business certification

Technical capability

Carriers must also execute several contracting documents with Menlo prior to the first shipment being tendered to that carrier. Those documents are cited below:

Master Agreement

Schedule of Services Agreement

Rate Addenda

Fuel Surcharge Agreement

Accessorial Agreement

Of particular note is that the Master Agreement includes several FAR clauses. Since the DTCI contract is FAR based, the FAR mandates that certain clauses must flow down to the subcontractors. Accordingly, these items within the Master Agreement are non-negotiable.